ATandT Claims 1 Million iPhone 4S Activations, Posts Lower Revenue
AT&T now has more than 100 million subscribers, although its revenues for the third quarter of 2011 declined slightly.
The carrier gained an additional 2.1 million subscribers in order to pass that 100-million-mark, attributing the increase in part to smartphone subscribers. Sales of non-iPhone smartphones also increased, with the company selling 4.8 million units in that category during the quarter.
During the quarter, AT&T activated some 2.7 million iPhones, and sales of Android devices doubled from the year-ago quarter. The company announced its quarterly earrings Oct. 20.
Overall, AT&T reported consolidated revenues of $31.5 billion, down 0.3 percent from the same quarter a year earlier. Its net income hit $3.6 billion, a substantial decrease from $12.3 billion during the same quarter in 2010, when the carrier enjoyed one-time gains from the sale of Sterling Commerce along with a tax settlement; excluding those events, though, income actually rose from 54 cents a share in 2010 to 61 cents a share in the current quarter.
AT&T also reported that it had activated more than 1 million iPhone 4S units by Oct. 18. In a statement published on its Website, the carrier claimed that number made the current iPhone launch "the most successful" in the company's history.
However, the quarter ended Sept. 30, meaning AT&T's bottom line didn't benefit from the iPhone 4S, which Apple launched Oct. 14. The device apparently sold some 4 million units by the end of its first weekend in release, including pre-orders, and its performance through the end of 2011 could have a significant effect on AT&T revenues and profits.
The iPhone 4S is also expected to improve the balance sheets for Apple, whose most recent quarter was judged disappointing by analysts who expected higher iPhone sales.
"While iPhone sales slowed during the September quarter due to the timing of the iPhone 4S launch, we anticipate iPhone sales could rebound to over 27 [million] units during the December quarter," Canaccord Genuity analyst Michael Walkley wrote in an Oct. 19 research note. "We believe the iPhone will grow faster than the smartphone market during the December quarter."
International distribution will play a part in Apple's overall sales numbers for the coming quarter. "We believe iPhone sales will continue to ramp internationally with China, Russia and Brazil," he added. "In fact, Asia-Pacific region sales increased by over 100 percent [year-over-year], and we believe solid sales of the iPhone in this region (especially China) will continue to ramp."
AT&T was originally the sole carrier of the iPhone in the United States, but now must compete on that front against Sprint and Verizon.